Home Prices Slip after Years Rising

The housing market is slowing down, with home values seeing the first negative monthly change since the market began its recovery nearly four years ago, according to the Zillow® July Real Estate Market Reportsi.

Nationally, home value appreciation is leveling off after its rapid pace in the early years of the recovery. Homes lost 0.1 percent of their value in July, falling to a Zillow Home Value Indexiiof$179,900. Homes appreciated three percent on an annual basis, down from 3.4 percent in June.

Of the 517 metros covered by Zillow, 204 saw a slowdown, including major metros likeWashington, DCandCincinnati, where home values declined month-over-month in July. The slowing appreciation is a sign that the market is returning to normal; economists have expected to see growth flattening out as the recovery continues.

Even hot markets likeDenver,Dallas,San JoseandSan Francisco, which had double-digit annual home value growth in July, saw their monthly appreciation rates ease from June.

“This slight dip in home values is a sign of the times. Many people didn’t think it was happening, but it is: we’re going negative,” said Zillow Chief EconomistSvenja Gudell. “We’ve been expecting to see a monthly decline as markets return to normal. However, this is not like the bubble bust. We’re not going to see 10 percent declines. The market is leveling off, and it’s good news, particularly for buyers, because it will ease some of the competitive pressure.”

Slowing home values could provide more opportunities for hopeful buyers who have been waiting on the sidelines for the market to cool off. More homes may be coming online as homeowners who have been watching strong home value growth decide to list their houses as appreciation slows and smaller gains are expected. This could help ease the constrained inventory the market has been facing for the past several months.

Meanwhile, rents continue to grow at a rapid pace, up 4.2 percent from last July to a Zillow Rent Indexiiiof$1,376. With no sign of rents slowing down and the potential for more homes for sale, conditions may be right for buyers to enter the market.

Metro Name

July 2015 Zillow Home Value Index (ZHVI)

Month-over-Month % Change in ZHVI

Year-over-Year % Change in ZHVI

July 2015 Zillow Rent Index (ZRI)

United States

$ 179,900

-0.1%

3.0%

$ 1,376

New York-Northern New Jersey

$ 384,100

0.1%

1.5%

$ 2,361

Los Angeles, CA

$ 536,400

0.1%

2.6%

$ 2,513

Chicago, IL

$ 190,700

0.4%

2.6%

$ 1,621

Dallas-Fort Worth, TX

$ 166,300

0.9%

13.3%

$ 1,480

Philadelphia, PA

$ 201,400

0.0%

0.1%

$ 1,586

Houston, TX

$ 161,000

0.8%

7.5%

$ 1,533

Washington, DC

$ 356,500

-0.5%

-0.7%

$ 2,109

Miami-Fort Lauderdale, FL

$ 219,200

0.6%

8.9%

$ 1,815

Atlanta, GA

$ 157,600

0.3%

5.8%

$ 1,262

Boston, MA

$ 370,900

-0.1%

2.5%

$ 2,228

San Francisco, CA

$ 756,100

0.6%

11.0%

$ 3,285

Detroit, MI

$ 118,500

0.7%

6.4%

$ 1,122

Riverside, CA

$ 287,800

0.0%

4.6%

$ 1,693

Phoenix, AZ

$ 201,900

-0.2%

4.0%

$ 1,267

Seattle, WA

$ 352,100

0.2%

6.6%

$ 1,892

Minneapolis-St Paul, MN

$ 212,300

-0.1%

2.6%

$ 1,527

San Diego, CA

$ 481,400

0.2%

5.2%

$ 2,344

St. Louis, MO

$ 135,700

0.3%

5.6%

$ 1,132

Tampa, FL

$ 152,700

0.5%

6.4%

$ 1,295

Baltimore, MD

$ 240,800

-0.3%

-0.6%

$ 1,735

Denver, CO

$ 300,300

0.4%

13.9%

$ 1,931

Pittsburgh, PA

$ 124,500

0.0%

1.5%

$ 1,099

Portland, OR

$ 291,900

0.7%

7.9%

$ 1,665

Sacramento, CA

$ 337,700

-0.1%

5.0%

$ 1,680

San Antonio, TX

$ 149,600

0.7%

3.3%

$ 1,329

Orlando, FL

$ 173,900

0.6%

5.2%

$ 1,338

Cincinnati, OH

$ 136,400

-0.5%

1.0%

$ 1,259

Cleveland, OH

$ 123,100

0.4%

2.5%

$ 1,150

Kansas City, MO

$ 142,300

0.6%

3.8%

$ 1,237

Las Vegas, NV

$ 189,700

0.4%

5.9%

$ 1,209

San Jose, CA

$ 891,500

0.7%

11.5%

$ 3,393

Columbus, OH

$ 148,800

0.2%

4.2%

$ 1,266

Charlotte, NC

$ 160,800

0.1%

3.7%

$ 1,250

Indianapolis, IN

$ 132,400

0.4%

3.0%

$ 1,202

Austin, TX

$ 232,900

1.0%

7.9%

$ 1,692

About ZillowZillow® is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow’s Chief Economist Dr.Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Zillow also sponsors the bi-annual Zillow Housing Confidence Index (ZHCI) which measures consumer confidence in local housing markets, both currently and over time. Launched in 2006, Zillow is owned and operated by Zillow Group (NASDAQ:Zand ZG), and headquartered inSeattle.

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iThe Zillow Real Estate Market Reports are a monthly overview of the national and local real estate markets. The reports are compiled by Zillow Real Estate Research. For more information, visitwww.zillow.com/research/. The data in Zillow’s Real Estate Market Reports are aggregated from public sources by a number of data providers for 928 metropolitan and micropolitan areas dating back to 1996. Mortgage and home loan data are typically recorded in each county and publicly available through a county recorder’s office. All current monthly data at the national, state, metro, city, ZIP code and neighborhood level can be accessed at www.zillow.com/local-info/andwww.zillow.com/research/data.iiThe Zillow Home Value Index is the median estimated home value for a given geographic area on a given day and includes the value of all single-family residences, condominiums and cooperatives, regardless of whether they sold within a given period. It is expressed in dollars, and seasonally adjusted.

iiiThe Zillow Rent Index is the median Rent Zestimate® (estimated monthly rental price) for a given geographic area on a given day, and includes the value of all single-family residences, condominiums, cooperatives and apartments in Zillow’s database, regardless of whether they are currently listed for rent. It is expressed in dollars.